If the demand for a good is highly elastic, that good is likely to have:
A. few close complements.
B. many close complements.
C. few close substitutes.
D. many close substitutes.
Answer: D
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Basically the United States' high rate of population growth since the time of George Washington's presidency
A. has been a drag on the United States' rate of economic growth. B. pushed up the United States' rate of unemployment. C. created a growing problem of not enough food to feed everyone. D. provided a market for the United States' farmers and manufacturers.
The privately-owned school system in Smalltown has a virtually unlimited capacity. It accepts all applicants and operates on both tuition and private donations. Although every resident places value on having an educated community, the school's revenues have suffered lately due to a large decline in private donations from the elderly population. Since the benefit that each citizen receives from
having an educated community is a public good, which of the following would not be correct? a. The free-rider problem causes the private market to undersupply education to the community. b. The government can potentially help the market reach a socially optimal level of education. c. A tax increase to pay for education could potentially make the community better off. d. The private market is the best way to supply education.
Assume that movement from point A to point B represents a 15 percent change in the price of goods and services. What would be the corresponding change in the price of inputs?
a. no change
b. 15 percent increase
c. 15 percent decrease
d. 100 percent increase
Suppose that real output is fixed and equal to 400, while velocity is fixed and equal to 5. Then, if the money supply is equal to 200, the price level will be:
A. 10. B. 7.5. C. 2.5. D. 5.